Obama's Tax Vaporware Policy

Much like software manufacturers who make all kinds of astounding claims about their software and the release turns out to be a massive disappointment, so too is President Obama's tax policy.

The Senate is taking up one of Obama's pet projects, adjusting the tax rates on the "rich".

During the campaign, Candidate Obama told everyone he wouldn't raise taxes on people making less than $250,000. Well, he's already lied about that since enacting an onerous cigarette tax that hits all American smokers regardless of income level to fund a massive expansion of the S-CHIP health care program. Now, he's pushing for adjusting the tax rates such that those making as little as $104,000 are going to get hammered with tax hikes starting in 2011.

Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, which has jurisdiction over federal tax law, is seeking a vote this year on legislation that would increase the income tax rates on some Americans who earn as little as $104,425 per year.

The bill, which Baucus introduced Thursday, would fulfill many of President Barack Obama’s promised tax changes, including making most of the tax cuts enacted under former President George W. Bush permanent while raising taxes on Americans making more than $250,000 per year.

But those making more than $250,000 per year would not be the only ones to see their taxes go up if Baucus’s bill becomes law.

The proposed legislation would raise the rates on the top two income brackets, from the current levels of 33 percent and 35 percent respectively, to 36 percent and 39.6 percent. The new rates would become effective after 2010.

The increase in the rates for these two brackets will affect all taxpayers who fall into these two brackets regardless of their filing status, according to Heritage Foundation Senior Policy Analyst Curtis Dubay, who reviewed the legislation.

That means some taxpayers earning as little as $104,425—far less than half the $250,000 threshold President Obama set for raising income taxes—would see their income tax rate increased.

Throw in the fact that there's no way that taxing the rich even at confiscatory levels not seen since World War II and thereafter and still balance the budget based on Obama's prodigious spending that the country simply cannot afford, and watch the level at which taxpayers get hit with tax hikes actually wanders down and encompasses many more people who are squarely in the middle class.